Hong Kong News

Nonpartisan, Noncommercial, unconstrained.
Saturday, Dec 09, 2023

Novo Land flats sell out in Tuen Mun as buyers get in before rate hike

Novo Land flats sell out in Tuen Mun as buyers get in before rate hike

Homebuyers in the city flocked to buy flats on offer this weekend at Sun Hung Kai’s Novo Land project in Tuen Mun, reflecting a pre-emptive move against an expected rise in prime rate.

Hong Kong extended its latest streak of strong weekend property sales on Saturday, as buyers rushed to snap up flats on offer at Sun Hung Kai Properties’ (SHKP) Novo Land development, in a pre-emptive move ahead of a potential new prime rate increase in the city.

SHKP, the city’s biggest developer by market cap, sold all of the 170 units on offer at the second phase of its Novo Land project in Tuen Mun just four hours after sales commenced at 9am on Saturday, according to local real property agents and media.

“About 80 per cent of buyers [at Novo Land] are from the New Territories, and they are very positive on the outlook of the development in the northern part of the city,” said Sammy Po Siu-ming, chief executive at Midland Realty’s residential division. “Lots of people piled in today after they failed to buy flats during Novo Land’s previous launches.”

By contrast, the 58 units on offer at Grand Victoria, a project in Cheung Sha Wan jointly developed by Wheelock Properties and Sino Land, found no buyers as of 3pm on Saturday.

A view of Sun Hung Kai Properties’ Novo Land development under construction in Tuen Mun in the New Territories.

The average sales price at Novo Land was HK$14,780 (US$1,883) per square foot, representing a 5.6 per cent increase from the initial launch of the development’s second phase in August and a 12 per cent gain from its first-phase offer last month. The size of units at Novo Land range from 242 square feet (22.5 square metres) to 708 square feet, which translates to a price band of between HK$3.5 million and HK$9.8 million.

The strong demand for flats at SHKP’s development on Saturday reflects the city’s robust streak of weekend sales in August, as developers provided discounts to attract more buyers.

Speculation that Hong Kong’s major commercial banks, including HSBC and BOC Hong Kong, will push for a prime rate increase also fuelled buying. The prime rate sets a reference to the mortgage rate.

Meanwhile, the average sales price at Grand Victoria was HK$26,508 per square foot, implying a 7.7 per cent increase from the development’s previous launch in March. The size of flats in the project range from 278 square feet to 807 square feet, which shows a price band of between HK$6.5 million and HK$22.9 million.

The Grand Victoria development under construction in Cheung Sha Wan is being jointly developed by Wheelock Properties and Sino Land.

US Federal Reserve Chair Jerome Powell on Friday asserted his stance to raise interest rates in a bid to drive down inflation at the annual Jackson Hole Economic Symposium, held in Wyoming. In July, the Fed raised the benchmark interest rate by 75 basis points for a second straight time in its most aggressive drive in three decades to tame high inflation.

While the Hong Kong Monetary Authority (HKMA) has raised its base lending rate – the borrowing cost charged on commercial lenders – each time the Fed tightened credit this year, HSBC and other note-issuing banks in the city have so far refrained from raising their prime rate, a move that analysts expect will erode margins.

Still, some economists predicted that the prime rate will rise by 25 basis points at the end of this year. The prime rate currently stands at 5 per cent at HSBC and its subsidiary Hang Seng Bank, as well as at BOC Hong Kong. Standard Chartered Bank and other local lenders have pegged their borrowing costs at 5.25 per cent.

In the previous cycle, the city’s banks waited through nine consecutive increments of 25 basis points increase by the HKMA before raising their prime rate by 12.5 basis points in 2018, passing some of the higher borrowing costs to customers for the first time in a decade.

Sentiment in Hong Kong’s property market has stabilised since June, when total transactions about newly built homes hit a 10-month high of about 1,300 units, according to Centaline. The property agency warned that housing demand may shrink moving forward because of new supply in the market and rising interest rates.

Hong Kong’s growth forecast this year could be lowered, Financial Secretary Paul Chan Mo-po said last month, as business confidence has been dented by ongoing Covid-19 control measures and the city’s closed border with the mainland.


Related Articles

Hong Kong News
Paper straws found to contain long-lasting and potentially toxic chemicals - study
FTX's Bankman-Fried headed for jail after judge revokes bail
Blackrock gets half a trillion dollar deal to rebuild Ukraine
Steve Jobs' Son Launches Venture Capital Firm With $200 Million For Cancer Treatments
Google reshuffles Assistant unit, lays off some staffers, to 'supercharge' products with A.I.
End of Viagra? FDA approved a gel against erectile dysfunction
UK sanctions Russians judges over dual British national Kara-Murza's trial
US restricts visa-free travel for Hungarian passport holders because of security concerns
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Political leader from South Africa, Julius Malema, led violent racist chants at a massive rally on Saturday
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
'I am not your servant': IndiGo crew member, passenger get into row over airline meal
Singapore Carries Out First Execution of a Woman in Two Decades Amid Capital Punishment Debate
Spanish Citizenship Granted to Iranian chess player who removed hijab
US Senate Republican Mitch McConnell freezes up, leaves press conference
Speaker McCarthy says the United States House of Representatives is getting ready to impeach Joe Biden.
San Francisco car crash
This camera man is a genius
3D ad in front of Burj Khalifa
Next level gaming
BMW driver…
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Unlike illegal imigrants coming by boats - US Citizens Will Need Visa To Travel To Europe in 2024
Musk announces Twitter name and logo change to X.com
The politician and the journalist lost control and started fighting on live broadcast.
The future of sports
Unveiling the Black Hole: The Mysterious Fate of EU's Aid to Ukraine
Farewell to a Music Titan: Tony Bennett, Renowned Jazz and Pop Vocalist, Passes Away at 96
Alarming Behavior Among Florida's Sharks Raises Concerns Over Possible Cocaine Exposure
Transgender Exclusion in Miss Italy Stirs Controversy Amidst Changing Global Beauty Pageant Landscape
Joe Biden admitted, in his own words, that he delivered what he promised in exchange for the $10 million bribe he received from the Ukraine Oil Company.
TikTok Takes On Spotify And Apple, Launches Own Music Service
Global Trend: Using Anti-Fake News Laws as Censorship Tools - A Deep Dive into Tunisia's Scenario
Arresting Putin During South African Visit Would Equate to War Declaration, Asserts President Ramaphosa
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
The Changing Face of Europe: How Mass Migration is Reshaping the Political Landscape
China Urges EU to Clarify Strategic Partnership Amid Trade Tensions
The Last Pour: Anchor Brewing, America's Pioneer Craft Brewer, Closes After 127 Years
Democracy not: EU's Digital Commissioner Considers Shutting Down Social Media Platforms Amid Social Unrest
Sarah Silverman and Renowned Authors Lodge Copyright Infringement Case Against OpenAI and Meta
Why Do Tech Executives Support Kennedy Jr.?
The New York Times Announces Closure of its Sports Section in Favor of The Athletic
BBC Anchor Huw Edwards Hospitalized Amid Child Sex Abuse Allegations, Family Confirms
Florida Attorney General requests Meta CEO's testimony on company's platforms' alleged facilitation of illicit activities
The Distorted Mirror of actual approval ratings: Examining the True Threat to Democracy Beyond the Persona of Putin
40,000 child slaves in Congo are forced to work in cobalt mines so we can drive electric cars.
A Swift Disappointment: Why Is Taylor Swift Bypassing Canada on Her Global Tour?